Posts tagged KITD
Readers, Money McBags apologizes for his absence yesterday, unfortunately he has a life outside of the great When Genius Prevailed and that life required him to spend all day watching Anna Paquin scenes now that she is oh so comfortable with her bisexuality, so you can’t really fault him for that. Anyway, today the market seems to be running like a lobotomized senior citizen with an advanced case of alzheimers as it forgets Europe is about to collapse under a pile of oversized debt, the US unemployment rate is stagnating like the rebuilding of the Twin Towers, and the great Hannah Hilton remains retired. That said, short term macro news is pushing the markets to new heights, levels it hasn’t seen since at least last Friday, so ring those bells because the economy is all of a sudden back (until tomorrow).
Driving the market up today was that the ECB raised their growth forecasts, China showed an increasing trade surplus, and clothes-less emperors are now becoming the rage (because despite today’s numbers, the economy still has no pants). The ECB said GDP growth for 2010 will now be 1% which is above the .8% they had repviously predicted and above the potential 0% on which most investors are betting. While they raised 2010 GDP forecasts, they lowered 2011 from 1.5% to 1.2% which means the absolute level of GDP at the end of 2011 is now expected to be lower than it previously was (since multiplying last year’s GDP by 1% and then 1.2% yields a lower number than multiplying it by the previous forecast of .8% and then 1.5%), but why let math get in the way of a market rally? Honestly, if logic, common sense, and facts mattered then the markets would be efficient and Burton Malkiel would be so celebrated that he would be applauded by young and old on his daily random walks. In other big news, China’s trade surplus rose in May giving investors hope that China can keep fueling an expanding global economy. Imports and exports both grew by ~50% in May driven largely by an increase in purchases of lead paint to go with an increase in sales of toys. With a $19.5B trade surplus for the month, the Chinese government should get loved for a long time at the Beijing Rick’s Cabaret but is getting even more pressure to let the renminbi float like Kelly Madison‘s renminbis in the deep end of the pool in her San Fernando Valley abode. Finally, Japan revised their GDP upwards from 4.9% to 5% as they forgot to include the new buttress they put up around Tokyo to defend Godzilla’s impending attack.
While international news seemed to be strong, US macro news was mixed at best, which has left Money McBags scratching his head over today’s rally (though it could also be the lice). The good news is that the budget deficit fell to $136B (and for those of you scoring at home $136B might be more than the price of all of the tea in China) thanks to higher tax receipts. Money McBags is not clear where the higher tax receipts came from as unemployment has remained the same so perhaps it is from people filing their quarterly capital gains taxes which should have been higher with the strong market rally which has now fallen faster and harder than Money McBags did for the lovely Amanda Seyfried. So we’ve got that going for us. In other US news, the trade deficit widened and housing foreclosures fell largely because banks have run out of repo men as bank repossesions reached a record high last month. While fewer foreclosures are good for the markets, the reason for it is as positive as saying fewer people walked out of the last Robin Williams movie (since of course fewer people attended). Finally, new claims for unemployment came out today and were worse than analyst guesses as claims fell by 3k to 456k. Making things more confusing was that last week’s new claims for unemployment were 453k so once again the (No) Labor Department has either confused the basic tenets of addition, lost some beads off of their abacus (no doubt purposely taken off to replace one of the office’s missing anal beads that likely got lodged in Hilda Solis’ shapely derriere during the department’s recently passed Memorial day picnic), or is just MAKING THE FUCKING NUMBERS UP. Last week Money McBags wrote how 460k -10k somehow = 453k and now the (No) Labor department is at it again by restating last week’s number from 453k to 459k, which is how this week we get 453k – 3k = 456k. So last week’s disappointing number was actually more disappointing than previously thought (which Money McBags predicted) which makes the new claims for unemployment numbers now less believable than Ellen Degeneres as a romantic lead (like in the ironically named Mr. Wrong, and of course what was wrong with Mr. was that he peed standing up). The market seems to think that continuing claims falling by 255k to 4.46MM is good news except for the fact that: 1. It’s not clear that the 255k drop wasn’t just people exhuasting their benefits, having been unemployed longer than the making of The Man Who Killed Don Quixote has been in production. and 2. 4.46MM people unemployed is still a fuckload of people. But hey, rally on my freinds, rally on.
In stock news, just about everything was up except for GS which has broken through their $135 support level on their way towards extinction. It will be interesting to see how aggressive the government goes after itself (I mean Goldman) because even Meagan Cheung could find fraud on their trading desks. Also, BP rose 6% after Jim Cramer finally said to sell which once again proves his ability to be negatively correlated with the markets. That said, Money McBags wouldn’t go near BP unless he were wearing an extra strength contamination suit and had a lifetime supply of Lamivudine.
In small cap news, KITD hit its first short squeeze and jumped 8%+ and Money McBags hopes this is the first of many while MLNK was up a bit after crapping all over itself with yesterday’s earnings announcement. Money McBags is short on time today but tomorrow he will break down MLNK’s shit awful Q where their EBITDA dropped in half, their cash flow barely broke even, and they continued to pawn it off on new business taking longer to start-up. Wow. You know what Money McBags calls it when your new business takes longer to develop? Deep doodoo, and yes that is a bit of a technical term.
6/8/10 Midevening Report: Bernanke speech fails to significantly rally the market, says he’ll overpromise more next time
The market was relatively quiet today as there was a lack of macro news though Fed Chairman Ben Bernanke was out late Monday saying: “My best guess is that we’ll have a continued recovery, but it won’t feel terrific like a blumpkin from Sara Varone followed by a nice wipe with that oh so soft aloe infused Cottonelle. Instead, it will feel more like having your nut hairs pulled out while listening to the smooth adult contemporary sounds of Sade”. Ok, Money McBags made part of that up but that’s not the point, the point is, Bernanke is hedging on this recovery like he just bought FAZ in his IRA. While he says the economy won’t likely have a double dip recession, he did not say it wouldn’t have a single dip recession followed by a falling off the cliff depression, so it’s merely a matter of semantics. Bernanke also dusted off his Phillips curve (though it wasn’t as curvy as Kimberly Phillips) and added that the central bank would raise rates before the economy returns to full employment, which should be any century now. That’s great, but Money McBags would like to know what the full employment rate is? Is it 4%, 6%, or whatever proof the whiskey was that Milton Friedman was drinking when he came up with NAIRU (seriously Milt, you couldn’t have come up with a catchier name than the Non-Accelerating Inflation Rate of Unemployment? Really? That name could put Ritalin out of business because just reading it has to make even the most hyperactive person drowsy.)? The point is, the full employment rate is a bogus hurdle as there is no set rate so saying rates will rise before we reach that level is as helpful as saying you’ll stop running when you catch the horizon. With the stimulus funds coming to an end over the next few quarters and the economy already starting to show signs of coming down from its stimulus induced bender where it got drunk off of bail outs and hand outs and now finds itself waking up in a pool of its own spending while dry humping Greece’s Aegean coast to the sweet whisperings of Benjamin S. Bernanke and and his magical money making machine, the economy is in a precarious position (though not as precarious of a position as Kirstie Alley‘s girdle).
Internationally, the new government in Hungary has announced a set of austerity measures aimed at solving their debt crisis. The austerity measures include cutting public wages, overhauling the tax system, banning mortgage lending in foreign currencies, and stopping free cookie day at the National Assembly. Also, the European Union’s finance ministers met in Luxembourg with the most important outcomes being an agreement to allow tighter oversight on countries suspected of falsifying economic data and an agreement that Ginger Spice was the hottest of the Spice Girls.
In stock news, AAPL introduced a $199 iPhone which has a front facing camera that should now allow users to masturbate on chatroulette wherever they may be. The new iPhone is slimmer than the previous version, has better picture quality, and doesn’t insist on cuddling when you are done with it. In other stock news, MCD had better than guessed at growth for the month of May of 4.8% worldwide thanks to the fact that they sell cheap shit and people can only afford to eat cheap shit. The company announced the falling Euro would impact yearly earnings but announced that to make up for those lost earning they are forming a partnership with American Heart Association to get a portion of the profits from all angiograms caused by eating their food. Finally, analysts were busy today with INTC downgraded by SIG to neutral because the analyst had to do something to try to drum up trading business for SIG and Dick Bove, who never saw a financial stock he didn’t like and didn’t understand, cut his price target at JP Morgan from jizztastic to just ballticklingly good.
In small cap stocks, Money McBags favorite KITD continues to get pounded like Alexis Texas on payday. With ~70% of their revenues coming from Europe, topline should be impacted by the 15%-20% drop in the Euro with investors seemingly betting on worse. Given that, it is difficult to come up with a short term valuation for KITD as the Euro appears to be falling off worse than proper grammar or Britney Spears’ top. Last Q, the $/Euro exchange rate was somewhere around $1.38 and this Q, it’s likely going to be around $1.25, and after that, who knows? So lets take a worse case scenario where we assume the exchange goes to parity. So that would be a 28% drop in the exchange rate from last Q. Money McBags thinks at the high end KITD can do $150MM of revenue next year, but let’s call it $130MM because of the global uncertainty. The thing is, that number was derived off of the old $/EU exchange so if we knock 70% of their revenue (their EU exposed revenue) by 28%, revenue decreases by ~$25MM. So insted of $130MM, a worst case scenario yields revenue of $105MM and at 20% EBITDA margins, that is ~$21MM EBITDA. The company currently has a market cap of $210MM but they have somewhere around $30MM in cash after their last deal so they have an enterprise value of roughly $180MM and thus are currently at a worst case scenario of ~9x EV/EBITDA and topline growth in that scenario would still be ~20% (and dollar euro parity is almost as bad a scenario for the financial markets as having your daughter bring home Jordan Van Der Sloot for Thanksgiving Break). Of course all of this assumes that their costs and revenue are tied together so if the euro drops by 28% the associated costs with that will drop by 28% and thus margins will remain intact. The point is, Money McBags still likes this company longterm as they are in a rapidly growing space that is going to continue to grow for several years, but there are certainly short term currency issues. However, they are diversifying their revenues in to the US and Asia so as to become less dependent on Europe so while things look bad now, in the long run this company should be fine. With uncertainty comes opportunity and it is getting to the point where this company is just getting stupid cheap.
5/25/10 Midafternoon Report: Volatility causes market to go up and down faster than a time constrained fluff girl
The markets sold off hard again today until the late afternoon with the the sell off being caused by Europe going to zero, financial reform, and now fucking North Korea dropping a turd in the proverbial kimchee bowl, and the hardness being caused by the market having grabbed a workout with Amanda Carrier. So la-di-fucking-da. With Kim Jong Il apparently getting his Napoleon complex on and dropping a South Korean warship like a diahrreatic drops logs (that is with ease and aplomb), the markets have more to worry about than a parent who sends their kids for music lessons at Gary Glitter’s house. It is ugly out there today (and not Lady GaGa ugly, but Amy Winehouse on crack sprinkled with a bit of Tina Yothers ugly) and Money McBags’ screen was redder than a baboon’s ass with a deep and gaping anal fissure for most of the day. So what is an investor to do other than hide under their desks and dream of long walks on the beach with Melissa Giraldo while hoping the bad man leaves them alone? If Money McBags had the answer, he would certainly let all of you know, but for now, he is hedging the volatility and waiting for things to settle before stepping back in to names that have good long term trends and are right now just guilty by association like the cast of a Robin Williams movie (names like KO, MCD, VMW, GOOG). The market could really go either way at this technical level and while Money McBags is a very cunning linguist, he is not clairvoyant and thus does not want to bet on what will win in the current pissing match between bad macroeconomics and reasonable company fundamentals.
In US news, consumer confidence was up today to it’s highest levels since May 2008 when it was caught doing lines in a Hollywood bathroom with Lindsay Lohan. Americans are now rosier about job prospects as longterm unemployed people can no longer pay for phone service and thus have dropped off of the radar of people running these surveys. Adding to the optimism is the complete lack of global perspective by US workers who think “european” is just something you say to your friend at the urinal next to you. Also, LIBOR in dollars is spiking like it is Karch Karily after a health dose of PEDs. The dollar Libor-OIS spread which is a gauge of banks’ reluctance to lend widened to the most since July and signals that banks are questioning the viability of their peers like a young Michael Jackson used to question the viability of Marlon. And making matters worse is that the VIX continues to shoot up and investors have to hope that it is using one of Magic Johnson’s needles and thus will soon die down. Also, housing prices fell last quarter according the Case-Shiller report and fell sequentially for the month but were up modestly year over year. So taking whatever metric and time frame you choose to use, housing prices were about as robust as Detroit’s economy or Sarah Palin‘s vocabulary.
Internationally, shit is still all fucked up with Europe’s economy sinking like Angela Merkel’s neckline before a night out with the Bundestag and all investors can do is hope to grab on to some floatation devices to avoid sinking. Spain and their banking system are sparking fears today with regional bank Cajasur having been bailed out yesterday and who knows what to be bailed out tomorrow leaving Spain’s banking system under more fire than the Spanish Armada at Gravelines in 1588. There is real fear that insolvency could spread like herpes in the Kardashian family and if that happens, not even extra strength Valtrex will be able to save the Europe’s economy. Of course today, North Korea has slapped their tiny penises (or is it peni? Can someone exhume William Safire and ask him?) on the table to take part in the global cock off to see who can fuck shit up the most. After South Korea finally picked out the right stationary and calligrapher, they formally accused North Korea of sinking one of their warships in an incident that happened back in March. South Korea also relisted North Korea as their “principal enemy” knocking forks, Don Rickles, and Yonggary down on their list. In return, North Korea has suspended any interaction with their neighbors to the South, banned South Korean ships from territorial waters and air space, and taken out an ad in the Rodong Sinmun calling South Korea a bunch of “chodes.” While this is not good news, Money McBags could give a shit if North and South Korea want to go to war, stop talking with each other, or have a fucking pillow fight. What Money McBags cares about is the markets and as long as this threat of war doesn’t stop sweat shops in Seoul from banging out willy warmers, he will blissfully ignore this hissy fit and assume everything will get better.
In stock news, GS is about the only thing up big today as investors fly to the safety of the US government. Other financials continue to trade down as new legislation may require them to raise more reserves. spin off their profitable derivatives desks, and stop being such dicks. In other stocks, DELL announced plans for an iPad rival which they are tentatively calling “failure” and Microsoft announced a management shake-up with the head of their entertainment division “retiring,” no doubt to spend more time with his Zune. With MSFT lagging Apple, Google, Nintendo, and the abacus in developing consumer products people actually want to buy, hiring someone with vision is going to be key for MSFT to grow back to a market leader. Finally Autozone is up 5% today after reporting numbers better than estimates due to new store openings and higher demand for auto parts. They expect continued strong demand for replacement parts as fewer people are buying new cars since it’s not necessary to drive to one’s living room which is where 20MM people now work.
In small cap news, KITD is getting pummeled again today. Money McBags can’t defend this stock anymore as he has said everything he can say. He is going to hold on to his shares and just not pay attention to the price in this volatility. Either their A/R are fucked or they’re not and if they’re not, this stock is easily a double from here. Also, CTGX which Money McBags has blogged about many times and which he puked out the day of the “flash crash” may have bottomed out today as it is up in this tape. The company is trading at ~10x Money McBags’ fiscal 2011 EPS which implies 50% growth. Their upside relies on government spending on electronic medical records and even if Europe falls in to the ocean and North Korea taints South Korea’s kimchee supply, the US government is still going to be doling out billions of dollars to get EMR up and running. So CTGX’s main IBM outsourcing business may come under fire in a bad economy, but EMR should help pull them through. There’s a lot of Y2K about this company, but luckily, we’re about to start the medical Y2K and they should post impressive earnings. Money McBags is likely going to buy back when shit settles down a bit. Right now low liquidity names scare him more than seemingly hot chicks with adam’s apples.
5/20/10 Midafternoon Report: S&P slides closer to next technical level of 0, most economists predict a bounce from there.
Fucking Europe. Seriously. First they tried to tax us without letting us represent ourselves and you know what, we don’t play that way. Then they got all upitty and burned down the White House while poor little James Madison sat on his gelding and got his S’mores on. And after that we’ve had to bail them out of losing a fucking war to the worst human ever (and Money McBags does not mean Bill Laimbeer), got stuck with Pride and Prejudice being taught to every high school class in America, and were subjected to the fucking Spice Girls. Really? Jeesh. As if Europe has not treated us poorly enough by using us like a young lady in Lawrence Taylor’s hotel room, now they have decided to have their whole fucking economy go to $0 because the loose union of countries can’t keep the weakest links from exhibiting worse moral hazard than Magic Johnson’s wife after finding extra strength condoms. Sure, we fucked up the whole financial system first, but for fucksake Europe, at least we know whom to blame. So clean your shit up because Money McBags doesn’t want to have another revolution and have to throw your tea away because his tea bagging is reserved for Faye Reagan only. As an aside, Money McBags is aware that every example he used above refers to Britain and their tea and fucking krumpets eating, bad teeth having, and fag smoking nation, and that Britain does not use the Euro and therefore is not the problem. That said, his commentary stands after all, we all know it wasn’t over when the Germans bombed Pearl Harbor.
In US macro news, ain’t a lot of good shit going on today. New claims for unemployment spiked to 471k, up 25k from last week and the first rise in five weeks which surprised everyone but the 20MM people looking for jobs. Riddle me this, with unemployment so high, how the fuck are all of these economists still getting paid for adding absolutely no value? It is a more fraudulent occupation than the Chief Compliance Officer at Goldman Sachs or Lady GaGa’s stylist. Not only were new claims for unemployment up, but the index of leading indicators was down .1% which was worse than economist guesses for a .2% gain as apparently they confused the word “leading” with “made-up.” Finally, the Philadelphia Fed said manufacturing rose to 21.4 but was short of the 22 predicted by consensus estimates. In that same report, the jobs number fell and more unemployment is only going to do wonders for the lovely metropolitan Philadelphia area where the motto is “if it’s not nailed down, it’s ours.”
Politically, the SEC continues to investigate what is now being called the “flash crash” because “high frequency trade off,” “stock schlock,” and “holy fuck what just happened” apparently weren’t catchy enough. When they’re done investigating the crash and can completely rule out trannie porn as the cause, Money McBags hopes they investigate why the market is going to $0. Also, Senate Democrats apparently voted down a proposal for financial reform because Senators Feingold and Cantwell didn’t think the proposed regulation went far enough and Money McBags applauds the state of Washington’s lovely Ms. Cantwell who couldn’t well pass the current legislation without stricter rules on derivatives. The junior Senator said “Even something like Hoover Dam with all of the great concrete and all of the great engineering and all the great things that make that structure work, still has a problem if somebody drills a hole in the bottom of it.” Well said and to be brutally honest, Money McBags trusts any 51 year old single, never been married, woman when she talks about needing to proverbially put fingers in dykes.
Internationally, well, internationally things are more fucked than Dexter Manley in a spelling bee or Keynesian economics. Germany’s ban on naked short selling continues to spook the market as German traders all run to their nearest Breuninger’s to load up on slacks. Making matters worse is that Greek workers are on a 24 hour strike, or what used to be known as “Tuesday.” Money McBags isn’t saying that Greek workers are lazy, but does it really take more than 300 years to clean up some rubble from the fucking Parthenon? I mean we now have things called cranes and bulldozers. Luckily, French economy minister Christine Lagarde said: “I absolutely do not think that the euro is in danger” before adding “it will provide great kindling for Europeans when they can no longer afford heat.”
As for stock news, well, everything was down, especially financials though the always optimistic, rarely right, and yet deliciously named Dick Bove (rhymes with “oy vey”) said banks stocks “may fall another 10% to 12% reflecting market fears but they are still very attractive investments.” He then opined, “Longer term, I still expect that these stocks will grow in multiples, not percentages, as long as we feed them after midnight, expose them to bright lights, and dunk them in water.” SPLS actually put up a good Q today, unfortunately the market cares less about performance than a John Meriwether investor. Staples CEO said he is a little more optimistic than he has been and raised the low end of guidance for Q2. Williams-Sonoma also posted better than expected profits, raised guidance, and said they are getting more positive about their customers coming back as apparently there is still a demographic that likes to buy overpriced shit that they don’t need. Also, Game Stop also put up a good quarter thanks to popular games like “Battlefield Bad Company 2,” “God of War III,” and “Erin Andrews Peephole Finder.” It’s no surprise that a video game retailer would put up a good quarter because stoners are still selling the shit out of weed, something about inelastic demand. Finally, Sears put up a shit awful Q simply because they are Sears.
In small cap news, everything is going haywire again except KITD has somehow moved up on another high volume day. Money McBags has talked about KITD all week but their sell of was overdone if you believe management. The spike in A/R has investors worried, especially as those receivables are tied to european revenues but management had a mostly logical response to the spike which Money McBags broke down the other day. One of Money McBags’ favorite small shorts (along with Bridget the Midget), WGO, has been getting hammered lately and he’d like to think it is because investors are finally realizing this company is not going to break even for at least another year and not just because everything is down. WGO simply does not earn money and now that inventories have been un-destocked, they can’t play the positive cash flow game anymore. Even if WGO were to somehow earn money, for the stock to trade at its current price of ~$12.50, WGO would have to earn $1.25 next year because Money McBags would never pay more than 10x for a company selling an expensive discretionary good with little operational flexibility in the biggest recession since Herbert Hoover stuck to the gold standard. So if you want to play the downside, shorting WGO is a decent option. That said, when the market settles down, Money McBags will be looking to add with companies like CTGX, ARTG, TMRK, RICK, and QCOR on his to buy list. But hey, be careful out there.
5/19/10 Midafternoon Report: VIX shoots up, claims it doesn’t have a problem, just wants to try to take its mind off global recession
The market got clobbered again today (until a closing minutes rally) like it insulted Preston Brooks’ uncle or like it had one too many shots of tequila while watching the donkey show. Investors continue to fear the impending doom of Europe with their quaint monetary system, silly accents, and love of black jeans. However, macro news in the US was marginal today with inflation at its lowest level in 44 years which should allow the Fed to keep rates at historic lows until it causes the next bubble. Core inflation, which takes out the effects of things on which people actually spend their money like food, energy, and lap dances, was flat and thus led to the lowest 12 month gain since LBJ was president, yo-yos were a fad, and full muff was the style. Overall though, consumer prices fell by .1% so on average the little money you have left will now get you .1% closer to buying some shit you can’t afford. On the housing front, mortgage demand shriveled up worse than your “jumbo arm” after diving into the arctic ocean immediately after viewing a Hanna Hilton opus. With the federal tax credit for homebuying now expired, mortgage purchase applications fell by 27% despite record low rates and home sellers making sure all of their carpets match their drapes (and for the record, Money McBags is not in favor of carpeting for his hardwood). Making matters worse is that foreclosures rose to a record high 4.63% and now 1 out of every 7 homes is either in foreclosure or delinquency or as it’s known on the Street “a AAA rated Goldman MBS CDO.” Finally, the SEC is trying to put in circuit breakers for all S&P 500 stocks to combat the stranglehold high frequency traders have on the market (and as always, Money McBags is a big proponent of the Camel Clutch as the best stranglehold). While these measures may have the effect of bringing a knife to a gun fight or hiring Magic Johnson to judge a grammar contest, the circuit breakers will seek to pause trading for five minutes if the price of a stock moves by 10% or more in a five-minute period or if Bar Refaeli show up on the floor of any exchange.
Internationally, investors are still freaked out by Angela Merkel’s preemptive strike on naked short sellers and will make sure they have an extra pair of pants with them at all times just in case. Germany’s new shortng regulation has caused investors to wonder what exactly German leaders know that is not public as German bank stocks have yet to come under attack and usually politicians wait for things to crumble before acting. Strangely, the rest of Europe has not followed what could now be the biggest Merkel boner since Fred failed to touch second base (and Money McBags would never fail to touch Angela‘s second base). The failure of other european countries to follow Germany’s lead in regulating their markets is causing investors to question the strength of the EU while applauding Europe’s sanity because we all know what happened last time Europe followed the Germans.
In stock news, does anyone really care? No seriously. The market is not trading on fundamentals right now as forecasts for next year are more dubious than receiving a letter from Ted Kaczynski. Money McBags has been harping on analysts using normalized earnings as a valuation metric for awhile now since normalized went out the door with subprime CDOs, easy credit, and the advent of the very NSFW muff guessing (though Money McBags does use normalized earnings in his EPAX valuation, but there is something to be said about being logically inconsistent, just ask Mark Souder who apparently values families so much, he has more than one). Anyway, HPQ put up a nice quarter last night, beating analyst estimates and raising guidance thanks to strong demand for their PCs, a resurgence of their printer business, and absolutely no influence from Carly Fiorina in the past five years. The company earned $1.09 per share, beating analyst guesses by $.04 and gave full year guidance of $4.45 eps to $4.50 eps which topped analyst guesses of $4.45, or by about the amount of their beat this Q. The printing division grew revenue by 8% as they apparently supply the US Treasury with laser printers to spit out more dollars. In other stocks, TGT put up a solid quarter though not nearly as delightful as BJ’s who swallowed up the competition. BJ’s beat estimates and saw a 4% increase in customer traffic thanks to higher sales of candy, cigarettes and awesomeness.
In small cap news, once again Money McBags favorite KITD is getting demolished on high volume. Either a large owner had a margin call, a Portia De Rossi fat finger, or just wants the fuck out like Ricky Martin trapped in a closet. Here is what Money McBags knows:
1. CEO Kaleil Tuzman bought 100k shares the other week. When a CEO is buying, that usually means good news unless the CEO is Ken Lay and he is buying Enron. That said, this should be at worst slightly positive.
2. Their Q was ok by Money McBags’ standards but caused analysts to increase targets. This should be a slight positive as obviously, analysts are just guessing.
3. They diluted the shit out of shareholders last month and have yet to put the majority of that money to work. This is a big negative.
4. They are levered to EU revenues. Another big negative, like hiring Bernie Madoff to help allocate your assets.
5. Kelly Madison puts the ILF in MILF. And that is a huge positive for everyone involved.
6. When the markets are diving, nobody wants to own a weird little company posting negative eps (thanks to one timers and derivative charges) with a promotional CEO who just wants to build something big enough and quick enough to sell. There is obviously risk, that is why they call it gambling, I mean investing.
A lot of little stocks are taking it in the yingus right now. Look at former Money McBags favorite RICK which is down around 30% from where we sold and almost 40% from the top (and it is definitely time to start the due diligence on this stock again, especially if it invloves doing a stress test of their performers’ assets). Heck, FHCO was down 5% today, which was not unforseen by Money McBags, but their business is fine. The point is, no one wants to own dinky little companies when the world is going to zero, so take a deep breath and do some real due dilligence now because when the market stops falling, there will be some very good buys.
The markets fell again today as US macro news was mediocre at best, fears in China have risen from red alert to Kung Pao levels, and Germany has banned naked short selling of stocks and CDS (though you are still encouraged to get long Salzgitter and Money McBags’ “salzgitter” would get very long for Sonya Kraus and he would certainly let her take the other side of his Siemens trade). With the ban on naked short selling in Germany, the markets floundered as traders sought to unwind positions and find alternative ways, or countries, to continue with the same bets they have been making. This market reeks of dislocation worse than Ronnie Brown’s lisfranc.
Not helping matters was that US macro data was more mixed than a can of nuts (and please, write your own punchline). Home building rose in April with new home starts up 5.8%, the most since October 2008 as home builders prove to be more optimistic than Brooklyn Decker‘s bikini waxer. However, construction plans fell to their lowest level this year as the tax credit ran out and people remain unfucking employed. Building permits were down 11.5% and economists had guessed that they would be moderately up which once again proves that a broken clock is wrong 86,498 times a day. In other macro news, seasonally adjusted PPI was down .1% last month due to more people keeping their eyelids shut as a result of allergies (and yes Money McBags has used the PPI pun before, but it is still horribly funny). Core PPI, which excludes the essentials such as food, energy, and oxygen, was up .2%. Money McBags always loves that economists apparently don’t care about food and energy prices as a gauge of inflation which is as rational as a pareto inefficient nash equilibrium like the prisoner’s dilemma (and if Money McBags were ever a prisoner, he would have no dilemma because he simply wouldn’t pick up the soap). Interestingly, energy prices actually slumped by .8% thanks to natural gas prices retreating from booming to silent but deadly and food prices declined by .2% despite meat rising 5.1% and thus beating meat price rises going back seven years. The good news though is that inflation appears to be tamer than a Dane Cook stand up routine.
Internationally, in addition to Germany banning naked shorting (and Money McBags hopes they don’t ban naked cavorting), the EU sent 14.5B euro to Greece today and told them to keep the tip. With that 14.5B, the EU hopes to stave off Greek defaults, restore order to the European financial system, and receive a free two-liter of coke with their souvlaki since their order exceeded $20. Also, the ZEW Center for European Economic Research (ZEW of course standing for zero economic worth) said its indicator of German economic sentiment fell in May to 46 from 53. The good news is that the indicator’s historical average is 27, the bad news is that the 46 was below the consensus guess of 47, and the even worse news is that Lucy Pinder has never been in my kitchen. But it’s not just Europe that is going in to the crapper like last night’s bean burrito washed down with an extra large cup of metamucil and healthy dollop of “we’re fucked,” but also China as Chinese investors are also starting to get more nervous than Jackie Chan trying to roll his “r”s. The stock market in China remains lackluster, down 21% for the year despite being sprinkled with MSG to keep investors coming back for more. Driving the sell off has been expectations of rising interest rates, fear of tighter bank lending to help rein in inflation and quiet soaring property prices, and fortune cookies throughout the region reading “You’re going down” (in bed. Booooyah!!). The markets remain more jittery than Sarah Palin in a spelling bee, so remain careful.
In stock news, Walmart put up a good quarter beating analyst guesses of $.85 eps by $.03. The world’s largest seller of cheap crap had sales of $99B which were up 6% despite a 1.4% drop in same store sales. Guidance was generally inline though management said sales are shifting away from entertainment and apparel and into do-it yourself auto repairs, pharmacy, and tight fitting tops. Home Depot announced a good quarter and raised their outlook, yet the stock traded down as analysts think the outlook to be too rosy after Lowe’s took a giant dump on Q2 forecasts yesterday. Finally, financials fell again as potential new credit card regulations hit card issuers and fear of Europe imploding hit banks. In all, it is uglier out there than Minnie Driver‘s face and tomorrow could get much much worse as fear has seeped back in to the market.
In small cap stocks, everything sucked. KITD got hit with another big block trade around midday despite both Merriman Curhan Ford and Roth Capital’s analysts raising price targets after yesterday’s Q. Money McBags promised he would listen to or watch their quarterly call today but he has been too busy to follow through on that, so his analysis from yesterday still stands. The fact is it is a weird little company, exposed to many different currencies, and highly acquisitve in a market that may soon like none of those three things. So the market may trade this down on technicals and fears, but fundamentally, if you don’t mind some pain for awhile, it is worth holding on to like a drowning straight man would hold on to Christina Hendricks‘ life preservers.
The market was somehow flat today after spending most of the day down again as the perilousness of Europe’s debt situation continues to worry investors like laryngitis worries Pavarotti or like coming in to contact with Paris Hilton worries osmophobes. Not only is Europe raining ash on the market’s parade (both literally and figuratively, though to be fair, the market’s parade today was in honor of Norwegian Constitution Day (better known as pedophilia Christmas for the tradtion of children’s parades), which ranks somewhere between the invention of nose hair clippers and the launch of the Edsel in the pantheon of modern events, so not a big deal) but US macro news was mildly disappointing as well. The NY Fed released their monthly manufacturing report and the gauge of general business conditions fell to empty. The business index dropped from 31 to 19 and analysts had guessed it would be 30. As always, Money McBags has no idea what the difference between 31 and 19 is (other than maybe a few kids and a meth problem), but he knows that they’re both legal. The new order index also tried to make this a Blue Monday by falling from 29 to 14 as inventories have been restocked (or un-destocked, whatever). One positive aspect of the report though was that employment strengthened as payrolls grew the fastest they have in six years as NY manufacturing plants try to keep up with demand for tools and building materials to help batten down foreclosed on houses. In other US macro news, home builders’ sentiment hit a 2.5 year high as apparently delusion has finally creeped in to lift their spirits. The index rose to a whopping 22 while analysts guessed it would be 20, so the difference is a rounding error or a stutter. The bigger issue is that 50 or greater means more people are optimistic, so with the index only at 22, people are just slightly less negative, like a guy who breaks up with Amy Winehouse to date Mayim Bialik.
Internationally, the Euro continues to sink today as if it were a Brazilian Real in 1999 or had just hired Ted McGinley to star in its new TV drama (tentatively to be called The Big Crash Theory). The ECB was out buying 16.5B of sovereign debt and in order to try to show they aren’t just printing Euros, they will be taking in 16.5B of deposits from banks and paying out interest. Wow. So the banks get some free money while the ECB gets worthless bonds and has to pay interest on the money they didn’t “print.” Seems a bit odd but then again, so does Rene Zellweger‘s face and that’s never seemed to hinder her. Also, bank lending in Europe is taking a significant hit as the rates banks charge each other for loans in dollars rose to a nine month high. The Libor-OIS spread (which isn’t nearly as interesting as the rumored Rachel Uchitel Playboy spread) increased to 24 basis points, the most since August, thus signaling that banks in Europe are as interested in lending as the FED is interested in transparency or as Ellen Degeneres is interested in penis.
In stock news, GM posted their first profit as apparently people can now only afford shitty cars. GM earned $865MM and proved that all you need to do to succeed in business is suck badly at your job, lose a ton of money, and then get bailed out by good old Uncle Sam and his magic printing press. Money McBags only laments that he missed that class during his business school days. Not only did GM post a profit, but they are on course to go public again in Q4 to try to see if the investors have learned the old adage “Fool me once, shame on you, fool me twice, go fuck yourself.” Additonally, GM is said to be looking to get back in to the financing business which is a bit like letting Bernie Madoff handle the prison finances, filling the Goodyear blimp with hydrogen, or hiring Roman Polanski to babysit your 14 year old daughter. In other earnings news, LOW beat earnings forecasts but like all companies in the past week, gave guidance more disappointing than Nicole Eggert‘s movie career (and Money McBags had so much hope). CEO Robert Niblock said that 2010 will be a “year of transition” while significant growth won’t happen until 2011, and if it doesn’t, no one will remember he said it would. Guidance for Q2 was $.57 to $.59 per share which was below analyst estimates of $.62 per share and sent the stock down for the day.
In small cap news, KITD had their quarterly earnings release today and you all know Money McBags loves KITD like Joanie loves Chachi or high frequency traders love turning off liquidity when the market is tumbling. The stock is trading down heavily thanks to some block trades around midday where someone just wanted to puke this out like a bulimic with emetophilia at an all you can eat Sizzler buffet. Money McBags hasn’t had a chance to listen to or watch their call, though he will tonight or tommorow, but he did go through their Q and hear the last 20 minutes of Q&A. To be honest, their Q was a bit lighter on the revenue side than Money McBags would have liked to see. Revenue of $17.4MM was up 80% y/y but up only 8% sequentially, though management explained that this is typically a sequentially down revenue Q due to reduced digital media consumption in the industry. That said, EBITDA margins were only 17% after being 19% last Q and accounts receivables continue to be higher than John Belushi at a Chateau Marmont casino night. Management explained that as they are a small company with Fortune 500 clients, they have about as much leverage in bill collecting as He Ping Ping does on a see saw with Shaquille O’Neal (and that’s not just because Mr. Ping Ping was so small, but also because he is dead). As they explained, they have been getting business in towards the end of the Q which causes A/R to spike right before the Q but their larger clients get around to paying them within 45 to 60 days typically since KITD’s services are usually a small expense for them. An interesting point made by CEO Tuzman was that they could factor their receivables but they choose not to because they are not worried about collecting and thus don’t want to give up the economics. Their customers are going to pay as they are big, established companies, but they just take a bit longer. Three other interesting points:
1. In the press release they say: “In answer to a couple of investors’ questions, we have not seen any slow-down in IP video-related expenditures in Europe as a result of the
2. They purchased a company called Benchmark which gives them a presence in Singapore, mainland China, and Southeast Asia. Benchmark is supposed to have $10MM in revenue in the next 12 months and they paid ~$11MM for it if Money McBags did the math correctly. The deal should be immediately accretive and will open up opportunities in Asia for them where there are two main competitors who they hinted that they may already be in negotiations with to do JVs or acquisitions. Money McBags is glad they are finding shit to buy with all of the dilutive equity they just raised.
3. Kelly Brook is hot.
Anyway, guidance for this year which was released a few quarters ago was $75MM+ revenue but since then they have added Multicast which should be ~$12MM revenue and 9 months of Benchmark which should be ~$7.5MM revenue, so they are now on pace for ~$94MM in revenue. However, they only earned $17.5MM this Q so in the next 3 Qs they are going to have to average ~$25MM revenue which seems a bit like a stretch. In terms of earnings, gross profit was up to 61%, a number they said will likely continue to climb a bit depending on mix and after stripping out merger, restructuring, non-cash stock comp, and integration expense, Money McBags has KITD with ~$1.5MM of operating income this Q and with the 23MM shares they now have, that would have been ~.07 EPS. So not great, but on the right track. To give you an idea about the leverage though, if they had earned $25MM in revenue, they would have had another ~$4.5MM of gross profit and even if op ex rose $1MM, that would have earned another $.15 putting them at $.22 eps or ~$.88 eps run rate and they are trading at ~15x that with today’s sell off. As highlighted earlier, guidance and acquisitions now get us to $25MM revenue quarters so over the next year that type of operating EPS is possible, and with 50% growth, KITD remains very cheap.
The markets were on fucking fire today as investors shook off the historic drop last Thursday, apparently confident that the SEC looking in to the causes of the sell off will yield answers other than the current ones whch include: “Beats me,” “How the fuck should I know,” “and hey look, it’s Enrico Pallazzo!“ The head of the SEC, Mary Schapiro, who in her short time leading the never distinguished agency has already instituted sweeping reform including such things as following up on leads, proactively going after market manipulators, and clamping down on tranny porn at the office, has called last week’s market failure “profoundly disappointing and troubling.” She then added, “I haven’t been this disappointed with anything since Meaghan Chung worked at the SEC or since I bought a slap chop.” Luckily regulators are getting closer to finding out what was wrong with the market by ruling out several potential causes such as erroneous fat finger trades (known here on WGP as Portia De Rossis), unusual trading in P&G stock, hackers, terrorist activity, and Noriel Roubini shouting “Beetle Juice” three times quickly. The SEC has sent out subpoenas to further look into this matter, though they have not said to whom they have sent them, but Mary Schapiro was seen asking Goldman’s CEO if his first name is spelled with one “L” or two. While equities are bouncing back, it is still showering gold in the markets as gold has hit an all-time high which means Mt. T’s neck is now the richest person in America (and he pities the fool who told him all that jewelry was silly). The fact that investors are rushing in to gold is not a good sign for the markets as it signals little faith in currencies and a fear that escalating debt will continue to cause gevernments to run their printing presses more rapidly than drunk Hollywood wannabes run through Paris Hilton‘s panties. Money McBags remains very afraid.
Helping drive the markets up today is that Spain has announced an austerity plan that will involve cutting wages of government employees, reducing public investment spend, and increasing the use of home grown green technologies such as spanish fly. There is real fear that workers may strike throughout the countrty, but economists are fairly certain strikes won’t come to fruition because strikes would cut in to workers’ daily siestas. In addition to Spain making like they are serious about their budget, in much the same way that James McGreevey made like he was serious about Dina Matos, Portugal sold the fuck out of some bonds. Portugal raised 1B euro (though the euro isn’t worth what it used to be) which is a good sign for the markets, though the fact that they need to raise another ~20B by the end of the year is a sign worse than waking up pantsless in a West Hollywood alley with a sore rear end and rainbow colored socks. Joining in on all of the debt lip service in Europe (and Money McBags wishes Faye Reagan would give his growing debt some lip service), is Britain who is instituting budget cuts as unemploymnet spikes to its highest level in 16 years. The new fiscal policies could include a tax on banks, black jeans, and Lucy Pinder downloads. Also, data came out today showing GDP in Europe was up modestly in Q1, growing .2%, or as it’s better known as: a rounding error.
In the US, markets rocketed up thanks to positive forecasts from tech companies who said they expect it to be sunny with a chance of silicon. Tech giants IBM and INTC both gave positive outlooks today with IBM saying they expect to earn at least $20 per share by 2015 which is double their current business and INTC’s CEO saying he expects a double digit percent rise in revenues and earnings. Additionally, MSFT was up today after they said they will offer Microsoft Office free online so the whole world can spend their days dicking around with PowerPoint for no charge. Wow. Technology hasn’t received news this good since Number 5 was found to be alive. Also, the US trade deficit widened to a 15 month high as exports were up 3.2% and imports were up 3.1% For March, the rise in exports reflected increased sales of American farm products, a wide range of heavy machinery, and dollars. The rise in imports was driven by a 26% jump in crude oil shipments (though not nearly as crude as Dice Clay CD shipments).
In small cap stocks, everything rode up like a hand on Alexis Texas‘ ample thighs. CRUS, TMRK, and KITD continue to rally even though Money McBags ditched them for liquidity reasons last week. Money McBags did buy back some KITD today in the $12.90s in anticipation of a good earnings call on Monday. If the market structure is healthy, KITD remains a high upside company. Also, QCOR is holding a conference call this afternoon to discuss the FDA panel’s ruling on Acthar last week where the drug was found to be both less filling and taste great by a panel of experts. The FDA panel voted 22-1 in favor of Acthar’s efficacy in treating IS but there was some concern over how manageable and reversible the complications were. Money McBags is sure QCOR will delve into all of this this afternoon, but on the surface it seems like very positive news since it points to the FDA putting IS on label for Acthar and thus allowing QCOR to market to IS doctors, something they have been unable to do despite being the favored IS treatment. Money McBags promised some analysis today and he has FHCO’s Q on his to do list (though it is much behind Alice Eve and Ashley on his to do list), but time ran short today so tomorrow he will try to hit you up with some micro to go with the macro.
Did I miss something yesterday? Jeesh, Money McBags takes a day off to fine tune his factors of production and Europe decides to mimic Ben Bernanke’s “too big to count” strategy by printing up enough Euros to finally finish off the Bialowieza Forest or to get 36 very straight hours with the lovely Ashley Dupre. Perhaps the EU just wanted to test out the theoretical economic J-curve as part of some bs study by INSEAD to help future business leaders understand the value of exporting, but if they really wanted to devalue their currency, they should have just married it to Mickey Rourke. But hey, as long as the EU is content to continue to tickle John Maynard Keynes’ shriveled balls with their embracing of debt, perhaps they’ll go shock thumb on Sir Thomas Gresham’s law by creating a shittier currency than the Euro in order to reinflate the dying currency’s value. Ugh. This bail out continues to promote moral hazard and serves to merely put a band aid on a gun shot wound or a regular condom on Lexington Steele. Giving more money to countries who spent it like Kirtstie Alley at a Sizzler on rib night is just bad business. If your kid ran up a credit card bill, odds are you’d take it the fuck away from them and not increase their credit line which is basically what is happening in Europe. So Greece, Spain, Lucy Pinder, keep buying the shit out of whatever you want because Jean-Claude Trichet and Christine LaGarde have the printing presses on full bore and it’s lend one lend one free day across the continent. And Europeans, start spending those Euros because the currency is about to become as worthless as campaign funds to John Edwards, binoculars to Stevie Wonder, or a lap dance to Richard Simmons.
The market however is rallying again today as apparently the UK is talking about instituting budget cuts. What is encouraging is that Britain is doing this despite its current hung parliament (and an English parliament hasn’t been this hung since the aptly named Dick Long dangled his legislation in the House of Commons in the late 1600s). With all of this commotion in Europe, let’s not forget that China may still be a problem as inflation is rising with home prices up 12.8%. China continues to boom with retail sales up 18.5% and bank lending in the month of April up to $113B. Hey EU, why not just quit screwing around and sell yourselves to China and be done with it. With China’s economy bubblerific, it would be a bit like AOL buying Time Warner, but that worked out well for everyone right (and by everyone, Money McBags means Steve Case)?
In US news, the SEC is getting exchanges to institute new circuit breakers to stop stocks from falling too much too quickly. In this way the SEC hopes to remanipulate the market from the high frequency traders who currently manipulate it. Money McBags still has no faith in the current market structure after last week’s crash that was only stopped by dumb luck. In macro news, wholesale inventories in the US rose .4% in March which was a tick below analyst guesses but puts wholesale inventories at their eight month high which is marginally not bad news for the economy.
In stock news, LM beat expectations, announced a potential $1B buyback, and apparently cured cancer as the stock is up 13%. They earned $.39 per share which bested analyst guesses of $.35 even though they still had $10.9B of outflows. LM also announced a “profit boosting” plan which consists of boosting more people out of jobs to increase overall profit as the investment manager continues to lose assest (though at a much slower pace). Alternatively, Priceline is down 10% today causing investors to all ask the questions “Priceline is still in business? Will they take Beenz?” Apparently PCLN’s guidance was weaker than Money McBags knees after encountering the lovely Raven Alexis as they warned of a slowdown in their international business for the upcoming quarter thanks to a series of events including the Iceland volcano erupting, the weakening of the Euro, and a week long Hanna Hilton marathon on Spice.
In small cap news, CRUS continues to rally after apparently Jim Cramer slathered all over it last night. Money McBags has been pimping CRUS for quite a while now even though he sold it the other day to mitigate his risk (but hey, who needed the extra 20% upside, ugh). Money McBags thinks $1.20 in eps is not unreasonable for CRUS which puts the company at ~10x + $2 in cash. He wouldn’t be buying here because Cramer’s picks tend to get a pop up before sliding back down, but this is a solid growth company (you can read for yourself if you just type CRUS in to the search box here, speaking of which, Money Mcbags would love to search Hayley Atwell‘s box). Money McBags is still concerned about the market structure and the influence high frequency traders have so he is not sure fundamental analysis is really all that worthwhile right now. If you believe in the markets though, KITD is ridonkulously cheap after the sell off last week and has yet to rebound. The issue that Money McBags is trying to work through though is KITD’s reliance on Europe with 70% of their revenue coming from European companies. Money McBags will ponder this as he swapped his holding into GLD but will be back analyzing companies tomorrow.
Holy fucking shit. You’ll have to excuse Money McBags today because he is still trying to put his limbs back on after jumping from his penthouse apartment during yesterday’s volatility which saw the market drop by 9% in 20 minutes. Whether it was spurred by riots in Greece, a fat finger (or as Portia Di Rossi would call it, “heaven”), or a broken flux capacitor, it is clear that high frequency trading exacerbated the problem and Money McBags is freaked the fuck out. As a dedicated reader of zerohedge, Money McBags applauds their foresight into, and explanation of, this problem and it is enough to make anyone want to pack it up and join the circus (though if Money McBags were to join the circus, he hopes it would be the Circus of the Stars so he could have the lovely Brooke Shields tame his lion). Anyway, all of you should read this explanation or simply watch this as Money McBags can offer no better insight in to what happened yesterday and frankly, is liquidating a lot of his shit right now because playing a game where the rules change at any time and you have no control over them is not something Money McBags wants to be a part of unless the game involves Heather Vandeven and the rule changes all involve tickling. What happened yesterday has made Money McBags feel sicker and more disgusted than he imagines Rosie O’Donnell’s kids will feel when they find out where their other mother puts her mouth at night. If you want more proof of what a sham the current market is, NASDAQ is cancelling the trades of 296 stocks from yesterday. So if you bought at the drop and made a fuckload of money, you are now left holding a dick sandwich without the bread. But hey, Money McBags has lost money on trades before so why won’t NASDAQ go back and retroactively cancel those? Who the fuck does Money McBags have to market manipulate or high frequency trade with to get someone to throw him a fucking trade break? Something about this whole thing smells fishier than Oprah Winfrey’s tampon after a 5k. The market as we know it might be dead, so be smart, and be ready.
In macro news, who gives a shit, but if you do, the US added 290k jobs and yet unemployment rose to 9.9%, as apparently they hired one person to do all 290k jobs. Economists guessed that 190k jobs would be added so the report was slightly better than expectations but 66k of the jobs added were temporary government jobs to deal with the census so before we reach for any bottles of Dom over a growth in jobs, lets be realistic about what is actually happening. And to try to keep people’s minds off of what happened to the market yesterday, the government revised the jobs numbers from each of the last 2 months upwards. That’s right, March’s job adds were revised upward from 162k to 230k and February was revised up from a loss of 14k to a gain of 39k. Hey, why not just revise each month to a gain of fucking 1MM as long as we are making shit up. Money McBags believes any of those numbers like he believes in the Lochness monster, dividing by zero, or the existence money shots in lesbian porn.
In stock news today, it doesn’t matter. Everything is being manipulated. Money McBags hedged his portfolio earlier this week with EPV and has been adding FAZ and GLD. He has also sold his favorite little companies for fear of liquidity issues. So bye bye CRUS, KITD, and CTGX. It is a sad sad day but one must not fight the market. Money McBags still believes in their stories and will buy them back once (and if) the market settles. If it settles up from here, he’s ok with that. Money McBags made good money on all of those so lets take some profits off the table while the market drops like John Edwards’ popularity or Hillary Duff on her engagement night. Money McBags needs some time off rigt now because what he thought was real may be faker than Tom Cruise’s marriage. So try to enjoy the weekend. Money Mcbags will likely be back Monday and will try to analyze companies and perhaps the market will have rallied all the way back by then and all of you who are buying right now will be enjoying bottles of Cristal and blumpkins in your seaside cabana, but be careful out there, because the retail investor is the sucker in this game and it is always better to be the suckee, than it is to be the sucker (unless you are from Transylvania).
And remember to speak well of Money McBags.